Kaival Brands Innovations Group Inc (KAVL)

[BuyNStonks]

My issue with the insane P/E's mentioned is that KAVL has no IP.

I certainly think there is money to be made with this stock but I think there is a lot of talk on this board that could use some tempering.

KAVL's business model is pretty clear cut and is effectively arbitrage. At the end of the day they are acting as a middle man and taking a piece off of the top. Additional products could certainly be added to the portfolio in time (THC BIDI) but KAVL's net income will always be very tightly linked to the amount of someone else's product they are moving.

A positive to this setup is that they have low overhead and should always turn a profit. In time this could lead to acquisitions or a dividend changing the calculus. At the moment though I don't see anything exiting to make me believe an exorbitant P/E ratio is on the horizon.

Last week there was talk of big tobacco investment. I still don't understand why this would benefit KAVL. If big tobacco were to get involved I would think they'd be throwing their money at BIDI since that is where the IP is. If it isn't a buy-out scenario this could theoretically benefit KAVL as the sales would pass through. Big tobacco would reap the rewards on the backend by sharing in the profits of BIDI.

Also as far as sales growth and new distributors is concerned - FAVS Inc accounted for 56% of sales in the previous quarter. Not sure when the other distributors came online. While the new distributors are a plus we don't have SEC filings talking about the arrangement or the minimum quantity/value of the relationship so that makes me believe they don't represent a material change to the organization.